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What is a potential customer, and how can you convert them?

Last updated

31 January 2024


Dovetail Editorial Team

Reviewed by

Hugh Good

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As a business, your bottom-line success lies in your team’s ability to sell, deliver quality experiences, and convert new customers. For this, you’ll need a robust plan and strategy for identifying and attracting potential customers.

But, before you can become a customer magnet, you’ll want to better understand what a potential customer is for your organization and business model.

In this article, you’ll discover the complexities and insights you need to know beyond a basic understanding of what a “potential customer” is. The methods below will enable you to develop engaging strategies that win over potential customers.

What is a potential customer?

A potential customer is someone who, as the name implies, has the “potential” to become a paying customer. In other words, a potential customer could be persuaded to consider your company’s offer—but they haven’t yet made a purchasing decision.

This might sound straightforward as a definition, but understanding the potential customer model involves getting to grips with some complexities.

What are a potential customer’s core characteristics?

Before you can market to an audience of potential customers, you need to know how to identify them based on certain preferences, motivations, and characteristics. A potential customer is someone who presents with the following characteristics:

  • They are aware of a particular problem—otherwise, they wouldn’t be on the hunt for a product or service solution.

  • They are aware that your brand has a potential solution to that problem.

  • They have the ability to purchase or make a purchasing decision.

  • They know and likely trust your brand.

Analyze your entire target audience and segment the potential customers by applying these characteristics as market research metrics.

What is the difference between an actual customer and a potential customer?

A potential customer may be interested in buying but hasn’t yet made a purchase. An actual customer is different. Your company can identify an actual customer as someone who has already engaged and made a purchase.

In simple terms, an actual customer is one who has already opted in as a subscriber, buyer, or user. The potential customer is someone with the intent to make a transaction who hasn’t yet committed.

What is the difference between a prospective customer and a potential customer?

Muddying the waters even more are the distinctions between prospective and potential customers.

A potential customer could eventually become your customer. A prospective customer, on the other hand, is someone who could and has the immediate need to make a purchasing decision.

Here’s an example (you’ll need to imagine you sell cars):

  • Anyone who can actually afford to buy a car from you is a potential customer.

  • Anyone who can afford to buy a car from you and is actively looking to trade in now is a prospective customer.

Different types of potential customers

As you evaluate your target audience and segment your potential customers, be mindful of recognizing the different types.


Believers are potential customers who will follow your brand blindly, ready to trust and buy from you regardless of what you or others say. Because they are ready and willing to buy from you, you won’t have to use as much marketing capital to encourage them to make a purchase.

As an example, a company like Apple has a massive base of believers (known as Mac-heads) in its target audience. These people will probably buy Apple products without any major marketing efforts or incentives.


Skeptics won’t be your prospective buyers. They’ll be ready to protest any attempts to “sell” to them.

In other words, these people are hard sells that traditional marketing messages or casual campaigns won’t persuade on their own. Sticking with the mobile phone theme, an example might be Apple users who are skeptics about ever becoming Android users (or vice versa.)


Sideliners haven’t yet decided whether they want to consider your brand, offer, or product. For most marketers, this is the group to target first with messaging and campaigns. Because they are undecided, they represent an untapped target market for your business.

How to identify potential customers

Identifying your potential customers should be a top priority, considering 72% of your potential customers, once they become customers, will share their brand experiences with six or more people.

Here are some additional insights outlining customer behavior in 2023:

  • 86% of customers were willing to pay substantially more in exchange for great customer service.

  • 49% of buyers made impulse purchases after they enjoyed a personalized customer experience.

  • 66% of buyers said a frustrating website experience negatively impacted their brand perception.

Understanding what your potential customers need and want will be a big driver in 2024. The challenge is always knowing how to spot and properly funnel these high-value potential customers into your company’s engagement strategies.

Start with the four proven methods below to quickly identify those with the means and intent to buy, positioning your brand as the best option.

1. Market research

Start by doing your homework. Market research is the most effective way to identify potential customers with intent to purchase.

Consider a variety of research methods, including interviews, ethnography, surveys, social media monitoring, and customer journey research. Buyer intent helps you separate the low-hanging fruit from the rest of your target audience.

2. Study competitors

It’s also best to study who your competitors are targeting with their advertising and marketing efforts. Since they’re likely targeting the same potential customers, you can use their campaigns to help you build a more strategic and differentiated approach.

Sign up for competitor newsletters, study their websites, and watch their engagements on social media to see what’s working (or not working) for them.

3. Networking and referrals

The consumer buying market has transitioned to online engagement, with ecommerce and digital platforms for buying practically anything. However, some traditional approaches to identifying potential customers, like networking and referral marketing, are still effective.

Always be reaching out to colleagues, industry partners, and past customers to drum up new business and funnel potential customers your way.

Establishing customer loyalty programs with referral incentives is also advantageous for identifying potential customers.

4. Promotion and advertising

Identify your audience of potential customers by strategically placing ads and promotions in front of them. Google Ads, social media promotions, and email campaign offers are great methods for spotting potential customers. You can also differentiate your brand with direct mail, event marketing, and brand activations.

How to reach potential customers

Once you can identify your potential customers, you can start laying out strategies for reaching, engaging, and converting them into actual customers. Of course, this requires layers of planning.

For most marketers, the following are the most effective methods for authentically reaching potential customers and connecting with them:

Segment buyer personas

Recognize what type of potential customer you’re targeting and segment them with unique personas. Use these personas to hone your marketing channels and messaging to align with sideliners.

Conduct omnichannel marketing

Be more visible with omnichannel marketing. It allows you to position your brand’s message or offer in front of your target customer across multiple platforms, which offers several benefits:

  • Improved targeting and personalization

  • Boosted visibility and research

  • Heightened customer experience

Automate layers of communication

Be available to your potential customers wherever and whenever they need you by automating communications. From chatbots and online forms to call centers and survey apps, stay connected to this target group at all times, ready to assist them.

Use the AIDA framework

Apply some structure to your messaging that speaks uniquely to your audience of potential customers. Consider frameworks like AIDA (attention, interest, desire, action) to craft resonating messages via email, social media, and ads.

Use the PASO framework

The PASO framework (problem, agitate, solution, outcome) is another messaging structure that helps attract potential customers. Use this concept when you email your potential customers, or when you design ads or craft messages for them.

Tips to inspire a potential customer to choose your brand

Get creative with your efforts to convert potential customers into actual customers. Inspire them to choose your brand over others in the space with the following tips:

Personalization and customization

Customize your approach to potential customers at every stage of the buyer journey using predictive analytics and tools to better understand their motivations.

Social media engagement

Build a brand presence on social media that feels like a community others will want to be a part of and join.

Discounts and special offers

Make sure your offers are unique, value-packed, and appealing to your potential customers.

Customer service experiences

Experiences matter. Ensure you have a robust platform of customer support in place to handle inquiries and objections, nurturing potential customer relationships and bringing them closer to making a purchase.

Be an industry authority

Attracting potential customers doesn’t always have to involve sales and ad campaigns. Developing thought leadership messaging and customer-centric tips can inspire customer engagement.

Sharing insights, professional advice, and solutions as part of your social, email, and content strategies can engage your audience authentically. You’ll resonate with them, inspiring trust in your brand.

Having a deeper understanding of who your potential customers are will help you get better at identifying them, connecting with them, and ultimately converting them. This guide to market research can help you improve your marketing and engagement strategies and start funneling those high-value prospects to conversion.

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